Link to the University of Pittsburgh
Link to the University Library SystemContact us link
AEI Banner

Macroprudential Policy in a Recovering Market: Too Much too Soon?. ESRI WP500. May 2015

McQuinn, Kieran and Duffy, David and Mc Inerney, Niall (2015) Macroprudential Policy in a Recovering Market: Too Much too Soon?. ESRI WP500. May 2015. [Working Paper]

[img] PDF - Published Version
Download (1282Kb)


    The aftermath of the 2007/08 financial crisis has resulted in many Central Banks and regulatory authorities examining the appropriateness of macroprudential policy as an effective and efficient policy option in preventing the emergence of future credit bubbles. Specific limits on loan-to-value (LTV) and loan-to-income (LTI) ratios have been assessed and applied in a large number of markets both in developing and developed economies as a means of ensuring greater financial stability. The Irish property and credit market were particularly affected in the crisis as the domestic housing market had, since 1995, experienced sustained price and housing supply increases. Much of the activity in the Irish market was fuelled by a sizeable credit bubble which was greatly facilitated by the growth of international wholesale funding post 2003. After a period of pronounced declines, Irish house prices in late 2013 started to increase significantly. In early 2015, the Irish Central Bank responded by imposing new LTV and LTI limits to curb house price inflation. However, the introduction of these measures comes at a time when housing supply and mortgage lending are at historically low levels. In this paper we use a newly developed structural model of the Irish property and credit market to examine the implications of these measures for house prices and key activity variables in the mortgage market.

    Export/Citation:EndNote | BibTeX | Dublin Core | ASCII (Chicago style) | HTML Citation | OpenURL
    Social Networking:
    Item Type: Working Paper
    Subjects for non-EU documents: Countries > Ireland
    EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on/reforms/economic governance
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Economic and Social Research Institute (ESRI), Dublin > ESRI Working Papers
    Depositing User: Alyssa McDonald
    Official EU Document: No
    Language: English
    Date Deposited: 15 Mar 2018 15:56
    Number of Pages: 36
    Last Modified: 15 Mar 2018 15:56

    Actions (login required)

    View Item

    Document Downloads